Wednesday, July 17, 2013

John Galt and the Theory of the Firm: ...Why should any large firm exist? ... We may live in a
market sea, but that sea is dotted with many islands that we call firms,
some of them quite large, within which decisions are made not via markets
but via hierarchy — even, you might say, via central planning. Clearly,
there are some things you don’t want to leave up to the market — the market
itself is telling us that, by creating those islands of planning and
hierarchy. ...

The thing is, however, that for a free-market true believer the recognition
that some things are best not left up to markets should be a disturbing
notion. If the limitations of markets in providing certain kinds of shared
services are important enough to justify the creation of command-and-control
entities with hundreds of thousands or even millions of workers, might there
not even be some goods and services (*cough* health care *cough*) best
provided by non-market means even at the level of the economy as a whole? ...

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'There are Some Things You Don’t Want to Leave Up to the Market'

Paul Krugman:

John Galt and the Theory of the Firm: ...Why should any large firm exist? ... We may live in a
market sea, but that sea is dotted with many islands that we call firms,
some of them quite large, within which decisions are made not via markets
but via hierarchy — even, you might say, via central planning. Clearly,
there are some things you don’t want to leave up to the market — the market
itself is telling us that, by creating those islands of planning and
hierarchy. ...

The thing is, however, that for a free-market true believer the recognition
that some things are best not left up to markets should be a disturbing
notion. If the limitations of markets in providing certain kinds of shared
services are important enough to justify the creation of command-and-control
entities with hundreds of thousands or even millions of workers, might there
not even be some goods and services (*cough* health care *cough*) best
provided by non-market means even at the level of the economy as a whole? ...